Probably don't have enough prop. Try a 12X7 or maybe a 13X4. Is the engine inverted? What plug are you using? Don't use paper for a gauge. Pick up a set of feeler gauges for $1 at Autozone or somewhere. Paper's not real consistant, especially when it gets wet. What's the book say ?? .002 to .004? Set 'em both at .003 and forget about them. If you have 2 gallons through it, and it was broken in per the manual, it's as broke in as it's going to get.